Does Your Current D&O Policy Offer Enough Coverage?

 

company directors liability

company directors liability

Many people running companies recognize that forgoing a directors & officers liability (D&O) insurance policy can be risky. However, it can be difficult to determine whether the company directors liability policy in place truly offers enough protection. Here are a few factors decision-makers should keep in mind when evaluating whether a D&O policy is sufficient.

 

Key Areas of Coverage

 

In general, company directors liability policies can offer three kinds of protection. These are:

 

  • Coverage for the cost of defending the organization against claims
  • Coverage for the expense of defending directors or officers against claims
  • Protection against loss of personal assets during a claim made against directors and officers

 

Organizations lacking even one of these three forms of coverage may be exposed to significant financial risk. However, an insurance agent can help an organization evaluate which forms of coverage are most essential.

 

Unusual Provisions and Fine Print

 

The specific scenarios that a company directors liability policy covers can vary considerably. Some policies cover the actions of past directors and officers, while others offer protection in the future against claims brought against current directors and officers. Some policies exclude certain behaviors, such as intentional misconduct, while others offer broad coverage.

 

Speak With an Expert

 

The best way to determine whether a D&O policy is sufficient is to meet with an insurance agent. These policies can change frequently as new areas of risk become evident, so a policy purchased in the past might be outdated. An insurance agent can explain the current available options and the areas where an old policy may not offer sufficient coverage.

 

This post was written by , posted on April 2, 2014 Wednesday at 11:17 pm

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